In response to official inflation figures released today, which show prices paid by consumers rising by 0.6% in August, unchanged from July, Michael Martins, Economist at the Institute of Directors, said:
“While inflation is stable this month, where there is pressure it is likely be for an increase as the cheaper pound makes imports more expensive. We are already seeing rising inflation in food, for example, much of which we import.
“One concerning area in today’s figures is furniture, where prices fell relative to the same time last year by 1.7%. This may indicate retailers are discounting in an effort to boost sales, perhaps concerned that general economic uncertainty will feed through to consumers.
“With Government spending increases remaining under pressure over the last few years, much of the post-crisis recovery has come from consumer spending. If the consumer confidence fades, overall growth will invariably suffer. We are expecting some fiscal stimulus from the Chancellor at the Autumn Statement, whether in the form of infrastructure projects or tax cuts.”